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Petitioners contend that they are entitled to claim Schedule
C business expense deductions in the amount of $78,573.34.
Petitioners have not presented any substantiation for their
1995 business expense deductions other than their 1995 business
transaction report prepared by Mr. Tijerina's firm. However, we
acknowledge that petitioners operated the restaurant, and,
therefore, must have incurred deductible business expenses.
Applying the Cohan rule discussed above, this Court will
make as close an approximation as we can in order to estimate
petitioners' business expense deductions for the 1995 tax year.
In doing so, we once again stress that petitioners have made no
effort to reconstruct their business expense deductions by
contacting vendors who conducted business with Villa Cabana in
the 1995 tax year.
We find that petitioners incurred the following deductible
business expenses for the 1995 tax year:
Rent $22,815
Sales tax 1,432
Advertising 700
Food, restaurant supplies, and soda 7,674
Insurance 1,173
Linen service 169
Office expenses 158
Contract labor 3,495
Utilities 1,825
Total 39,441
Though petitioners claim business expenses in excess of that
amount, we find that petitioners were unable to present any
credible evidence to substantiate any amounts except the
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